Exponential Business … how to grow faster with ideas, accelerators and multipliers

September 27, 2016

Exponential thinking is not just about thinking big, it is about the steps to go from small to big. If I were to take 30 linear steps, I’d end up 30 metres away. But if I said to you take 30 exponential steps, one, two, four, eight, sixteen, thirty-two and said where would you end up? The answer is a billion metres away, or twenty-six times around the planet.

Think about our changing attitudes to the future:

Think about today’s fast growth businesses …

Most eye-catching are the unicorns, the billion dollar start-ups who are disrupting almost every industry … Companies like taxi to food delivery platform Uber ($68bn), China’s electronics giant Xiaomi ($46bn) and car-sharing firm Didi Chuxing ($34bn), and peer to peer accomodation with Airbnb ($30bn). Most recently, add examples like millennial news channel Vice Media ($4bn), online educator Udacity ($2bn) and local delivery bikers Deliveroo ($1bn). Way back in history, 10 years ago, none of them existed.

So what has driven their exponential growth?

My next book explores the three distinctive ingredients of exponential growth companies:

Addictive ideas: the core idea has purpose and passion, it meets a new need and makes life better. It is built on a better vision of the future, making sense of change, and engaging people’s hopes and fears in following it. It must be distinctively articulated, often simple and bold, and powerfully resonates with its primary audience. In many cases this audience is millennial, but it might also be fast-rising demographics of emerging markets, or simply, the poorly served. People with a desire to rise up, to make things better and fairer, to capture and realise a dream. We live in an ideas economy. Ideas becomes additive, cool and social, precious and valuable, multiplying as contagions.

Innovation accelerators: innovation is not about technology, but the tsunami of new possibilities in every field from genetics to robotics, informatics and nanotechnology. Technologies enable incredible innovation. Innovation is what moves us forwards, the practical solution to big problems. And opportunities. Accelerators are new ways to innovate – new aspirations, speed, intelligent design – and new ways to implement – new business models, ecosystem partners, and intelligent platforms. This is where the entrepreneurial mind, meets the experience and persistence of execution – how to make bold ideas happen faster, to sustain and grow them further.

Market multipliers: the biggest impact of “digital” is the connectivity of physical and virtual worlds. Metcalfe’s law (network power is proportional to the square of the nodes), rather than Moore’s law (computing power doubles every 18 months), is what allows markets to multiply. Think in terms of peer-to-peer networks (most commonly social media, but also licensing or pyramid selling too!), where a contagion is amplified by collaboration, co-creation, and sustained by community with purpose. Compare this to the old world of linear, transactional thinking – you make a product, and sell it – you count the sales and go home. Instead, it’s about making connections connect, and networks work. Realising the benefits of collective ownership, participation and achievement. This is when exponential takes off.

Of course, most of the obvious examples are digital start-ups. The effects are most obvious and easily implemented here. Think of WhatsApp for example. The free messaging service rising to $19bn of value over 3 years with only 17 employees. In just a short time, its instant messaging has replaced not just phone calls but email too. It’s value of course, lies more in how Facebook can link it to its existing social networks in order to achieve more commercial impact, rather than to its intrinsic self. But that’s where we start to see the potential for larger, more physical companies, to grow exponentially too.

However most people struggle with exponential thinking and the huge difference between linear and non-linear change. So do most businesses and even whole industries. Look at the publishing and music industries now and a decade ago. Businesses now live or die based on their understanding of exponentials. If you don’t want to be the next Blockbuster or Blackberry or conversely, if you want to be the next Amazon or Google, you need deep immersion in the wonderful world of exponentials.

The starting point, then, is to see the future better. To think about how you can harness the power of addictive ideas, innovation accelerators and market multipliers.